Taking Control in Litigation: A Review of Legal Costs

Taking control in LitigationWe last considered the subject of costs in an article published in November 2007. At that time, we considered what requirements had to be followed by a firm to ensure that they were complying with the (then new) Solicitors’ Code of Conduct 2007. The most important part of the Code for costs is the rules that require clients to be given clear and accurate cost quotes and estimates. Most law-firm staff will have come to grips with the Code long ago, but new changes are pending that will further regulate this area of legal costs.   These changes are based on the recommendations of Lord Justice Jackson, who has spent more than a year creating a weighty, 663 page report

It is not yet certain what recommendations from the Jackson report will be taken up, but on the positive side it seems unlikely that the current rules on claiming costs will change substantially. This is fortunate, because the cost rules have many aspects where a Legal Secretary who is ‘switched-on’ can make an enormous difference. Add to this the fact that having some knowledge of how civil litigators are paid will impress many solicitors, and this becomes a subject worth knowing about.

The assessment of costs

So when can legal costs be claimed? Normally, when a civil claim is decided the winner is entitled to claim their costs from the loser. It is not uncommon for these costs to be nearly as much as the amount being sued for in the first place. It is this aspect (sometimes referred to as proportionality) that is likely to be changed by the Jackson report recommendations. It will therefore become more important than ever to ensure that the cost rules are followed correctly, as the courts may have little sympathy for a party who gets it wrong.

‘Assessment’ is the term used in the rules to refer to the process of the court deciding what costs can be claimed. There are two types of assessments:

  1. Summary assessments, which happen immediately after the final hearing and should be a relatively quick and simple process; and
  2. Detailed assessments, which require a full court hearing, as the costs being claimed are high and/or there are other complicating issues to be dealt with.

In this article we will outline the procedure for a detailed assessment, as this is the area where you can make the most impact as a Legal Secretary.

Detailed assessment procedure

Key aspects of the procedure are set out below, with the parts where you as a Legal Secretary can be involved highlighted in bold:

  1. An application for a detailed assessment should be started within three months of the final hearing. This is your first opportunity to shine, and this date should be put into the diary.
  2. The main document that will be used for the detailed assessment is the bill of costs. These bills are often complex documents prepared by cost draftsmen, who are a sub-profession of the legal profession. Once again, your organisational skills will be needed: first to send the case file (including any computer time recordings) to the draftsman and then to ensure that the papers are returned with the bill in good time.
  3. Usually, if the bill is prepared with plenty of time to spare during the three-month period after the final hearing, it is sent informally to the paying party. If you have been organised up to this point, then being in a position to send the bill early may make it  possible to settle the costs by negotiation. If negotiations are not successful, then your next job will be to get everything ready for an assessment heaing. To do this you will need to organise and send to the other side a copy of the bill, any counsel’s fee notes, any experts’ fee invoices and any written evidence of any disbursements (payments) exceeding £250.
  4. A further three months is allowed, once the bill is served on the paying party, for them to file points of dispute and you have the opportunity to file replies to these points. If no settlement can be reached in this time, then you will need to help get the papers ready for the assessment hearing. As with any hearing, you will need to ensure that both the court and the other side have full copies of the key documents, which in this case will be the bill, points of dispute and any replies. The case file will also need to be organised, as this will be taken to the assessment hearing. At the assessment hearing the case file is used to justify the time spent on the matter, so the better organised this is the easier it is to demonstrate to the court that the costs claimed are reasonable.
  5. All of the above tasks are time-consuming, so if you are able to help your fee earners by carrying them out it leaves them more time to get on with new chargeable work. A Secretary who can help the fee earner to be more profitable will be highly valued by any firm.